The Minority in Parliament has hit again on the Finance Minister, Ken Ofori-Atta, for his rallying name of help for the Financial institution of Ghana and its Governor, Dr Ernest Yedu Addison.
In a write-up revealed final Thursday and titled ‘Standing Robust with the Financial institution of Ghana’, Mr Ofori-Atta vouched for the competence of the Governor, having labored with him prior to now seven years.
“Governor Addison is a reliable skilled of quiet braveness,” Mr Ofori-Atta wrote.
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“In these almost seven years, we’ve labored collectively to make sure: the inviolability of the banking system; the institution of the Consolidated Financial institution of Ghana (CBG) and the Growth Financial institution of Ghana; the elevating of over $10 billion within the Eurobond market and AfriExim financial institution.
“He introduced inflation right down to single digits of seven.9% for the primary time; and managed a formidable interval of foreign money stability in our nation together with the implementation of the Gold-for-Oil programme.
“It’s both merely the peak of irony or a tragic reflection of the state of public discourse in our nation that this man, steps up in a interval of unprecedented world financial meltdown and home financial crises, and he’s being pilloried for his good work.”
However a hard-hitting response penned by Minority Chief Dr Cassiel Ato Forson, who can be a former Deputy Finance Minister, stated the “day of reckoning” for the 2 is close to.
“Lastly, the Minority in Parliament needs to remind Governor Addison and Mr. Ken Ofori-Atta that the day of reckoning may be very close to and they are going to be held accountable for his or her collective mess,” the response on Monday, September 18 concluded.
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Discover the total response beneath:
SHOULD CITIZENS STAND WITH THEBANK OF GHANA GOVERNOR WHO HAS AIDED THE GOVERNMENT’S ECONOMIC MANAGEMENT TEAM TO DESTROY LIVELIHOODS? THE POSITION OF THE MINORITY IN PARLIAMENT
In a latest assertion supposed to justify the gross incompetence and misgovernance of the management of the Financial institution of Ghana, the Minister of Finance, Ken Ofori-Atta sought to “converse for” the Financial institution of Ghana however ended up worsening the case of the central financial institution and deepening its credibility disaster. Ordinarily, the beguiled assertion by the Minister ought to be disregarded completely and handled with the contempt it deserves. Nevertheless, there’s the necessity to right a number of the key misconceptions peddled and to fact-check the assertions made by the Minister within the assertion.
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1.From the second paragraph, the Minister erroneously used nominal figures to argue that the Financial institution of Ghana had grown its property phenomenally between 2016 and 2022. If the Minister describes a 2.4-foldincrease from GHS53 billion in 2016 to GHS125.97billion in 2022 as phenomenal, how would he describe the rise in Financial institution of Ghana’s property by 8.2-foldduring the interval of the NDC authorities (2009-2016)when the identical property grew from GHS6.45 billion as at end-2008 to GHS53 billion as at end-2016?
2.What’s even worse is that the rise in property between 2016 and 2022 had been largely pushed by the unlawful financial financing of presidency;in different phrases, unlawful lending to authorities. This extreme printing and lending of cash to authorities is the reason for the financial woes the nation is at the moment going through(excessive inflation, volatility within the alternate fee, and excessive rates of interest) as confirmed by the IMF and the World Financial institution.
3.Within the third paragraph, the Minister once more used nominal GDP figures to argue that the scale of GDP had greater than doubled in worth from GHS219.6billion in 2016 to GHS610.2billion in 2022, with out adjusting for the influence of inflation inside the similar interval. The Minister should understand that nominal values will all the time rise, therefore the correct factor to do is to specific these in actual phrases.
4.On the watch of this Minister, actual GDP progress slowed between 2018 and 2020 and solely
recovered barely in 2021 due primarily to revenues fromthe three oil fields they inherited
in addition to the large covid-19 income inflows, and never resulting from any particular experience of
the Minister. Once more, the Minister’s administration of the financial system worsened in 2022 and it
is projected to additional deteriorate on the finish of 2023 with progress projection of 1.5%.
5.Inthe similar paragraph, the Minister additionally touted doubling revenuessince 2016, with complete
revenuesincreasing from GHS32billionin 2016 to GHS96.7billionby 2022. Once more,for the
comparability to be significant, these nominal figuresmust be expressed in actual phrases.At
greatest, these figures ought to be expressed as a ratio of GDP, or in different phrases motion of
therevenue-to-GDP ratio.Certainly,knowledge from the Ministry of Finance reveals that income
to-GDP on the watch of this Minister has not carried out effectively as he claims.Even in 2015,
and with all of the challenges confronted by the financial system then, income to GDP was 13.2%.
Given all of the sources that this authorities has obtained, together with twoadditional oil wells, authorities’s income to GDP is nearly 12.1%.The fiscal deficit on his watch
truly elevated inspite of the covid-19 income windfalls, therefore his declare of
rising revenuesover the interval is inconsistent with what occurred to authorities
6.In paragraph 6, the Minister spoke about resetting the monetary structure since 2017.
The query is what the price of doing so has been, and whether or not the train coud not
have been dealt with extra prudentlyand at a a lot lesser value and with minimal
disruptions within the monetary structure.
7.In paragraph 7, the Minister took one other incorrect dive stating,“Nevertheless, as many central
banks, together with Financial institution of Ghana, moved away from pursuing quantitative targets of
financial coverage in the direction of value targets, dominance of the central financial institution’s stability sheet as
the important thing metric has waned in lots of economies and in educational literature as wel”.That is
completely incorrect, each in apply and in principle. The central financial institution’s stability sheet
stays vital within the implementation of monetarypolicy, therefore liquidity administration
is on the core of this perform.
8.If the Minister had appreciated the workingsof financial coverage, he woud have recognized
that regardless of the transfer from financial targetingto inflation focusing on, iquidity
managementor the flexibility to manage the central financial institution’s stability sheet remainsan
integral a part of financial coverage implementation.
9.The Minister should additionally know that the usage of value targets doesn’t imply that financial
aggregates now not matter. They nonetheless do matter in financial coverage implementation and
subsequently extreme centra financial institution financing nonetheless issues for financial poicy.
10.In paragraph 8, the Minister merely re-echoed the Financial institution of Ghana’s earlier argument that
it was regular for a centra financial institution to function with detrimental fairness, and that its losses
recorded in 2022 wouldn’t have an effect on its operational effectivity. These industrialised
international locations cited within the paragraph didn’t underwrite any insolvency of their governments
which brought about such losses. The pandemic and the Russia/Ukraine conflict relatively supplied
windfall revenues to the federal government of Ghana,and therefore can’t be areason within the
case of Ghana.If the losses and the ensuing slide into detrimental fairness (projected to
be repeated in 2023) wouldn’t matter, why then is the IMF programmeasking for a
restore of the stability sheet of Financial institution of Ghana within the medium time period?
11.In paragraph 12, theMinister made one other flawed assertion that,“Accordingly, because the
focus shifts from direct targets of cash provide to rates of interest as operational targets,
the framework for analysing central financial institution stability sheets has shifted, enabling central
banks to play extra interventionist roles within the financial system than earlier than”. That is fully
and totally incorrect. No framework for analysing central financial institution stability sheet has shifted; it
stays similar. The Minister might be complicated the latest asset buy practices in some central banks within the industrialised world, with fiscal dominance. These are usually not the
similar in any respect.
12.The interventionist function performed by these central banks was to lend to corporates within the
personal sector in these international locations directy by means of asset purchases, which was later
redeemed and therefore the central financial institution’s stability sheet was restoredto good well being. This
is completely totally different from what the Minister has finished to Financial institution of Ghana’s stability sheet
by means of unlawful cash printing and lending to authorities. Certainly, this apply is on the
root of Ghana’s macroeconomic probems at the moment.
13.In paragraph 14, the Minister sought to rub salt into the harm of bizarre Ghanaians and
pensioners who out of patriotism invested into the way forward for our nation inlonger dated
bonds. The ebook of Proverbs 22:22 states, “Don’t steal from the poor, as a result of they’re
poor. Don’t oppress the needy within the gate.” And but this Minister continuesto tout a so
referred to as success of presidency’s debt operations that commenced in 2022. With sleaze,
this Minister continues to cite the bible and doesn’t realise that he and his Databank
owe an ethical and non secular responsibility to the individuals of Ghana to refund the commissions they
earned on these very bonds that he has restructured.
14.It is a ministerwho claimsto be trustworthy to the bible andsays that he’s doing a
voluntary job as Minister.But hewould neverrespond to the decision by Ghanaians to permit a
extra competent particular person to take over the financial and monetary affairs of the nation, in
theface of his poor efficiency.
15.On the brand new Financial institution of Ghana constructing, the Minister should recognize the opinion of
Ghanaians as represented by their parliamentarians, on the subject material. The central
financial institution has made losses in three of the previous six years; and is projected to declare a loss
once more in 2023and probably in 2024. It’s subsequently authentic for residents to hunt
clarifications concerning worth for cash issues in executing such a mission and
whether or not present circumstances justify a mission of that nature. The Minister ought to
relatively welcome the decision for an impartial audit into the mission and to make sure worth for
cash on the finish of the day.
16.In direction of the tip ofhis assertion,the Minister surprisinglyveered off from the protection
of Governor Addison and determined to name forgovernance reforms that he claims coud
strengthen the Financial institution of Ghana. He surprisingly suggests a plan to dislodge the time
honouredarrangement which makes the Governor of the Financial institution of Ghanathe Chair of the
Board,as is the casein over 99% of central banks. TheMinister should reaise that that is
preciselywhy Parliament’s oversight perform is keyasprovided inBanks and Specialised
DepositTaking Act 2016 (Act 930).
17.The Governor is remitted to report back to Parliament frequentlyand to yield to the latter’s
oversight perform. Sadly, Governor Addison has not yielded as required, and thMinister maybe doesn’t require him to take action, as a result of he himself can be usually
poor within the requirement.
18.The Minister should not search to dismantle this fastidiously thought-through company
governance structure on the central financial institution.There’s a cause why that is so in nearly all
international locations on the planet. Clearly,the present authorized and company governance regime on the
Financial institution of Ghana will not be the issue; Ken Ofori-Atta is the issue.
19.Historical past will keep in mind this Minister of Finance and the federal government’s Financial
Mismanagement Workforce headed by Alhaji Mahamudu Bawumia for taking Ghana to the
IMF in an ambulance.
20.The financial system that the NDC’s John Mahama authorities bequeathed to the Akufo-Addo/
Bawumia regime was much better than what Ghana has at present. It’s because the NPP
inherited a public debt that was sustainable at 56% of GDP;theAkufo-Addo/Bawumia
governmenthasincreased public debtto 103% of GDP with little or no to point out. In
nominal phrases, they inherited pubic debt of GHS 120 billion, which they’ve elevated
to roughly GHS600 billion with very ittle to point out.
21.Once more, the NDC left behind a sturdy financial system with very strongbuffers. The Mahama
authorities left behind the Sinking Fund, Stabilisation Fund, Ghana Infrastructure
Funding Financial institution (GIIF), Ghana EXIM Financial institution in addition to a sturdy tax income and oil income
from three oil fieldswhich the NPP used to kickstart their administration. But they’ve
little or no to point out and have collapsed the financial system on their watch.
22.Moreover, the NDC put in place a powerful tax coverage and a prudent and managed
expenditure regime, together with the Authorities Built-in Monetary Administration
Programs (GIFMIS). But the NPP got here in and processed expenditure exterior the GIFMIS structure.
23.Additionally it is noteworthy that the NDC authorities didn’t short-change Ghanaians with a haircut financial system. The NDC authorities had a credit standing of B+; the Akufo-Addo/Bawumia authorities’s administration of the financial system, with Ken Ofori-Atta because the Minister of Finance, is rated D, an excellent junky financial system.Surprisingly, this authorities that boasted of not signing as much as an IMF programme shamelessly did a Uturn and ended up with the worst type of an IMF programme; a programme that they introduced and signed up at a time that that they had collapsed the financial system and Ghana’s financial system was on the intensive care unit.
24.The Minister of Finance shouldn’t say anyplace once more that the NDC administration left behind a derailed IMF programme. Clearly, on the time we had been leaving workplace there was no financial finance. For the primary time within the historical past of Ghana, the federal government didn’t take cash from the central financial institution despite the fact that the regulation allowed the then administration to take 5% of the earlier 12 months’s income from the central financial institution. However as a authorities that cared in regards to the influence of inflation and the way it might destroy the livelihoods of bizarre Ghanaians, we stayed away from borrowing from the central financial institution.
25.The individuals of Ghana would recall that as a result of the Mahama administration left behind a sturdy financial system, the Akufo-Addo/Bawumia authorities inside the first three months of its assumption of workplace was capable of borrow US$2.25 billion from Franklin Templeton.
Right this moment, that very same Franklin Templeton won’t lend Ghana even one Greenback as a result of the nation will not be credit score worthy.
26.The Minister of Finance ought to carry his mess and his disgrace. He shouldn’t convey the NDC into issues that border on his greed, state seize for his household and mates in addition to his monumental failure in pubic workplace. We did higher than they’re doing and the NDC will all the time do higher when the great individuals of Ghana give John Mahama and our occasion the chance to manipulate from January, 2025.
27. Lastly, the Minority in Parliament needs to remind Governor Addison and Mr. Ken Ofori-Atta that the day of reckoning may be very close to and they are going to be held accountable for his or her collective mess.